When you’re looking to buy a property in the UK after living abroad, you’ll generally have two main mortgage paths to explore: a standard UK mortgage, or a specialised expat mortgage product.
Standard UK Mortgages VS Expat Mortgages
In an ideal world, you’d be able to secure a standard UK mortgage.
These mortgages typically offer the best interest rates and most favorable terms.
They’re the products you’ll find advertised by high street banks like Santander. However, these mortgages usually require a solid UK credit history, which you may not have if you’ve been living overseas for an extended period.
If you don’t have a solid UK credit history, you can either delay your application and take steps to build one as quickly as possible (we’ll cover the best ways to do this), or explore specific expat mortgage products.
Expat mortgages tend to have slightly higher interest rates (0.75-1% higher than UK mortgages) and may be less competitive when it comes to perks like free valuations (typically £999) and reduced lender fees. However, they remain a popular and viable option for many returning expats to get your foot back on the UK property ladder.
Many returning expats choose to take out a 2-year deal and then remortgage to a UK resident mortgage at the end of the term, for example.
Building Your UK Credit Profile
As mentioned, the key to accessing a UK product lies in establishing or re-establishing your UK credit history.
At UK Expat Mortgage, we’re happy to take a look at your situation and advise on the best strategy for you, and suggest how long it may take to establish a UK footprint (it can vary from case to case) and whether we think it’s worth it for you and your property aspirations.
However, here are some generally effective strategies to consider if this is your preferred route:
- Register to Vote with a Family Member: A quick way to start building credit is to register to vote at a UK address. If you don’t have your own place yet, consider using a family member’s address (with their permission, of course).
- Open a UK Bank Account: Once you’re on the electoral roll, you may be able to use this to piggy-back an application for a UK bank account, or get yourself added to a utility bill at the family member’s address. You need an account that reports to UK credit rating agencies like Experian, which is why an international bank account usually won’t suffice here.
- Create a Credit Report: You can then start building an Experian credit report which will mean you’re potentially eligible for a UK mortgage.
- You can also achieve the above through renting, but with most rental contracts a minimum of 12 months (or 6 months at best), this is a longer term approach to UK property ownership.
How we can help
Please get in touch if you’d like some assistance with understanding which route is better for your situation.
We can advise generally on how long it may take for you to establish a UK footprint and become eligible for a UK product, and also how much more expensive it would be if you were to go down the expat mortgage route.
It varies on a case by case basis and we can’t always predict the reliability of Experian’s credit reporting and a mortgage lender’s eligibility criteria, but we are happy to provide assistance based on our experience.